8-K
BayFirst Financial Corp. (BAFN)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 19, 2022
BAYFIRST FINANCIAL CORP.
(Exact name of registrant as specified in its charter)
| Florida | 001-41068 | 59-3665079 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission<br><br>file number) | (IRS employer<br><br>identification no.) |
| 700 Central Avenue | 33701 | |
| St. Petersburg, Florida | (Zip Code) | |
| (Address of principal executive offices) | ||
| (727) 440-6848 | ||
| (Registrant’s telephone number, including area code) |
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | ||||
|---|---|---|---|---|---|
| o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | ||||
| o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | ||||
| o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | Securities Registered pursuant to Section 12(b) of the Act: | |||
| --- | --- | --- | |||
| Title of each class registered | Trading Symbol(s) | Name of exchange on which registered | |||
| Common Stock | BAFN | The Nasdaq Stock Market LLC | Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1933 (§240.12b-2 of this chapter) | ||
| --- | |||||
| Emerging growth company ☑ | |||||
| If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ |
Item 7.01. Regulation FD Disclosure.
On May 19, 2022, BayFirst Financial Corp. (the “Company”), made available to investors a First Quarter 2022 Investor Presentation, containing an overview of the Company’s strategy and performance as of March 31, 2022. The Investor Presentation will be posted on the Company’s Investor Relations website at www.bayfirstfinancial.com, is furnished in this Report pursuant to this Item 7.01, as Exhibit 99.1 and is incorporated by reference.
Item 9.01 Financial Statements and Exhibits.
| (d) Exhibits | ||
|---|---|---|
| Exhibit Number | Exhibit Name | Filed Herewith |
| 99.1 | BayFirst Financial Corp. First Quarter 2022 Investor Presentation | * |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | * |
The information in this report (including the exhibits) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| BAYFIRST FINANCIAL CORP. | |
|---|---|
| Date: | May 19, 2022 |
| By: | /s/ Robin L. Oliver |
| Robin L. Oliver | |
| Chief Financial Officer and<br>Chief Operating Officer |
bafnq12022investorpresen
BayFirst Financial Corp. (NASDAQ:BAFN) 2022 – First Quarter Results (Unaudited)
Cautionary Statement Concerning Forward-Looking Information 2BAFN Q1 2022 In addition to the historical information contained herein, this presentation includes "forward-looking statements" within the meaning of such term in the Private Securities Litigation Reform Act of 1995. These statements are subject to many risks and uncertainties, including, but not limited to, the effects of the COVID-19 pandemic, global military hostilities, or climate changes, including their effects on the economic environment, our customers and our operations, as well as any changes to federal, state or local government laws, regulations or orders in connection with them; the ability of the Company to implement its strategy and expand its banking operations; changes in interest rates and other general economic, business and political conditions, including changes in the financial markets; changes in business plans as circumstances warrant; risks related to mergers and acquisitions; changes in benchmark interest rates used to price loans and deposits, changes in tax laws, regulations and guidance; and other risks detailed from time to time in filings made by the Company with the SEC, including, but not limited to those “Risk Factors” described in our most recent Form 10-K and Form 10-Q. Readers should note that the forward-looking statements included herein are not a guarantee of future events, and that actual events may differ materially from those made in or suggested by the forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as "will," "propose," "may," "plan," "seek," "expect," "intend," "estimate," "anticipate,“ "believe," "continue," or similar terminology. Any forward-looking statements presented herein are made only as of the date of this document, and we do not undertake any obligation to update or revise any forward-looking statements to reflect changes in assumptions, the occurrence of unanticipated events, or otherwise.
About BayFirst Financial Corp. 3BAFN Q1 2022 BayFirst Financial Corp. (“BayFirst” or the “Company”) is the holding company for BayFirst National Bank (f/k/a “First Home Bank” ). Founded in 1999 (the Bank) and 2000 (the Company). Current Banking Center Pending Banking Center BayFirst is a high-performing, growth-oriented bank holding company operating in one of the most attractive banking markets in the U.S. through its wholly-owned subsidiary, BayFirst National Bank, which changed its name and converted to a national banking charter on May 16, 2022. BayFirst offers services through its Community Banking Division and its Residential Mortgage Division. BayFirst has seven full-service locations: five in Pinellas County, one in Sarasota County, and one in Hillsborough County (Tampa). BayFirst originates residential mortgages through a network of nationwide loan production offices. CreditBench is BayFirst’s government guaranteed loan origination platform and is one of the nation’s top SBA 7(a) originators; in the top 25 by approved dollar volume and by number of units*. BayFirst adheres to the principles of its Environmental, Social and Governance (ESG) Policy Statement. * Through SBA fiscal Q2 ended 3/31/22
Investor Snapshot 4BAFN Q1 2022 Ticker Symbol: BAFN Recent Price*: $16.38 Shares Outstanding*: 4,013,173 Market Cap*: $65.7 million P/LTM EPS (x): 4.31 Price/Tangible Book (x): 0.77 Total Assets (3/31/22): $888.5 million Dividend: $0.08/share, quarterly *Source: S&P Global as of 5/17/2022
BAFN Q1 2022 5 • Dollars in thousands, except per share data SELECTED FINANCIAL DATA llars in Thousands, Except Per Share Data
An Innovative Community Bank 6 Management Depth, Diverse Board Strategically Driven, Progressive Organization Innovative, Dynamic and Highly Profitable Community Bank Attractive Market with Scarcity of Community Banks Scalable Advanced Technology Platform, Diversified Revenue Model BAFN Q1 2022
A Differentiated Business Model 7 CREDITBENCH • BayFirst’s SBA lending platform • Top 25* nationwide Preferred Lender • #1 SBA lender in the five county Tampa Bay area at SBA’s FY ended 9/30/21 • FlashCap 7(a) small loan program and traditional Core program • FlashCap loan generation from organic sales and FinTech partners • 11 experienced Core lenders with local and national referral sources • Building national sales team, currently five lenders RESIDENTIAL MORTGAGE • Nationwide full-scale mortgage banking platform • 20 loan production offices throughout the United States • $335.5 million origination volume in Q1’22 COMMUNITY BANKING • 7 banking centers in Tampa Bay, growing to 10 to 12 banking centers over the next two years • Full suite of commercial and consumer loan and deposit products to meet the needs of Tampa Bay individuals, families and small businesses RESIDENTIAL MORTGAGE DIVISION COMMUNITY BANKING DIVISION Increasingly diversified balance sheet funded by growing local core deposit base BAFN Q1 2022* Through SBA fiscal Q2 ended 3/31/22
Converted Bank subsidiary to national banking charter and changed name to BayFirst National Bank providing better alignment with national lending platforms Continued investments in technology infrastructure advancing BayFirst as a tech-focused bank: POWER, BayFirst’s proprietary loan origination system, goes live June 1st, which will create greater efficiencies in commercial/SBA loan origination process BayFirst Payments will launch in H2’22 The return on technology investments made over the past two years have yet to be materially realized Continued expense rationalization Exited residential mortgage consumer direct business in May ’22 and realigned staff Continued growth in conventional commercial and consumer lending, with $46mm and $44mm closed, respectively through April ’22 Continued advancement of ESG principles and DEI initiatives Carbon neutral banking centers, LEED certification on-going, free EV stations, PEACE Team, Minority-Owned Business Lending Program DEI Council formed Recognized in top 15 large-employer for “Best Places to Work” by Tampa Bay Business Journal 8BAFN Q1 2022 Q1’22 Significant Initiatives and Recent Events
Experienced Leadership Team 9BAFN Q1 2022 Executive & Title Experience Anthony N. Leo Chief Executive Officer & Director of BayFirst and the Bank Joined BayFirst in Q4 2013; Prior to joining BayFirst, provided management consulting and regulatory advisory services to community banks throughout the state of Florida and served as the interim CEO of three troubled banks between 2009 and 2013 Managing Director and Executive Vice President of Community Banks, Inc. (Nasdaq: CMTY) in Harrisburg, PA from 1993 until its sale to Susquehanna Bancshares, Inc. (NasdaqGS: SUSQ) 2007 B.A. in Political Science from George Washington University and a J.D. from George Washington University Law School. He is a member of the Bar in the District of Columbia and state of Maryland Robin Oliver EVP, Chief Financial Officer and Chief Operating Officer of BayFirst and the Bank Joined BayFirst in Q2 2018; Prior to joining BayFirst, Controller of Central Bank & Trust Co., a $2.5 billion privately held financial institution in Lexington, Kentucky, from May 2014 to June 2018 Approximately 16 years with Crowe Horwath LLP as an auditor in the financial institution practice; served over 80 financial institution clients with assets ranging from $50 million to $4.5 billion throughout career, including several SEC registrants and FDICIA reporting institutions B.S. in Accounting from the University of Kentucky Thomas G. Zernick EVP, President of the Bank Joined BayFirst in Q1 2016 Previous experience includes Florida Market President of Stearns Bank, SBA Product Manager of HomeBanc, and Community Bank President and SBA President of Republic Bank (MI) B.A. in Business Administration from University of Notre Dame Matthew Luckey EVP, Chief Banking Officer Joined BayFirst in Q3 2015 Previous experience includes commercial banking positions with The Bank of Tampa, Synovus Bank and SunTrust B.B.A. from The University of Georgia
Experienced Leadership Team 10BAFN Q1 2022 Executive & Title Experience Lewis Benner EVP, Chief Credit Officer Joined BayFirst in Q3 2018; Prior to joining BayFirst, President and CEO of 1st Manatee Bank, EVP and Chief Lending Officer of Sabal Palm Bank, Community Bank President of Gold Bank and President of Lancaster Region for Lebanon Valley National Bank/Fulton B.A. in Business Administration from Elizabethtown College Jeffrey M. Hunt EVP, Chief Strategy Officer Joined BayFirst in March 2016, initially as SVP in SBA Lending; Prior to joining BayFirst, approximately 17 years in investment banking serving as president or managing director for boutique firms primarily focused on financial services B.S. in Chemistry from Georgia Institute of Technology Brandi Jaber EVP, President of Residential Mortgage Division Joined BayFirst in Q4 2017; Prior to joining BayFirst, over fifteen years of Mortgage Banking administration experience as well as Human Resources supporting mid-size financial institutions B.B.S from The University of Florida and M.B.A from The University of Tampa John Macaluso EVP, Chief Technology Officer Joined BayFirst Fall 2020; Prior to joining BayFirst, over 37 years of information technology experience as SVP, Product and Market Strategy and Chief Technology Officer for Fiserv Inc., Director of Information Systems for New York Yankees, and Vice President, Emerging Technologies for Kforce.com B.A. in Business Administration from University of South Florida
Attractive Florida Markets 11 MEANINGFUL ECONOMIC TAILWINDS #2 state in the U.S.A. for net domestic migration* ~$1.2T economy, with 3.8% GDP growth in Q3’21 Attractive tax policy 2.5 million small businesses, more than any other Southeastern state 3rd most populous state Total Deposits in Pinellas, Hillsborough, Manatee and Sarasota Counties of $104bn * …Favorable Population Projections… …and Higher Expected Household Incomes Tier 1 Markets: - Citrus - Hernando - Pasco - Pinellas - Hillsborough - Polk - Manatee - Sarasota - Charlotte Tier 2 Markets: - Sumter - Lake - Orange - Osceola - Hardee - DeSoto - Highlands - Lee - Collier BAFN Q1 2022 *Source: S&P Global Market Intelligence as of June 30, 2021, U-Haul 3.21% 4.58% 4.79% 5.56% 0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00% USA Florida Tampa MSA Sarasota MSA G ro w th R at e ('2 2 to '2 7) 12.33% 14.13% 13.42% 15.08% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 16.00% USA Florida Tampa MSA Sarasota MSA G ro w th R at e ('2 2 to '2 7)
Balance Sheet 12BAFN Q1 2022 $559 $607 $632 $675 $722 $770 $1,207 $1,367 $874 $640 $570 $552 $1,545 $1,717 $1,198 $944 $917 $889 $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 3/31/22 Deposits Net Loans Held for Investment Assets Significant decreases in assets during 2021 resulted primarily from PPP loan forgiveness and loan sale activity, which was match-funded through the PPPLF. ($ in millions)
Balance Sheet Strength 13BAFN Q1 2022 11.75% 10.84% 12.06% 12.64% 12.22% 11.75% 0.22% 0.19% 0.30% 0.40% 0.43% 0.30% 0.00% 2.00% 4.00% 6.00% 8.00% 10.00% 12.00% 14.00% 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 3/31/22 Tier 1 Leverage (Bank) Non Performing Assets, Excluding Govt. Gtd. Loans, to Total Assets
Net Interest Margin 14BAFN Q1 2022 3.13% 3.21% 3.46% 3.04% 3.07% 3.25% 2.80% 2.90% 3.00% 3.10% 3.20% 3.30% 3.40% 3.50% Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Net Interest Margin (annualized)
Book Value Per Common Share 15BAFN Q1 2022 $16.04 $17.95 $21.16 $21.32 $21.77 $21.25 $16.02 $17.93 $21.14 $21.30 $21.75 $21.22 $12.00 $13.00 $14.00 $15.00 $16.00 $17.00 $18.00 $19.00 $20.00 $21.00 $22.00 12/31/20 03/31/21 06/30/21 09/30/21 12/31/21 3/31/22 Book Value Per Common Share Tangible Book Value Per Common Share
Loans Held for Investment 16BAFN Q1 2022 $1,366,516 $874,397 $639,678 $570,496 $551,627 $0 $200,000 $400,000 $600,000 $800,000 $1,000,000 $1,200,000 $1,400,000 $1,600,000 03/31/21 06/30/21 09/30/21 12/31/21 3/31/22 Loans Held for Investment (net) Composition of Loans Held for Investment (gross) as of March 31, 2022 41.0% 12.7% 6.0%3.3% 28.1% 6.4% 2.5% C&I Residential HELOC C&D CRE Owner Occupied CRE- Investor Consumer & Other * * Includes $44.36mm in PPP loans, net of origination fees
Deposits 17BAFN Q1 2022 Total Deposits (in thousands) $607,265 $632,322 $675,034 $721,685 $770,129 $500,000 $550,000 $600,000 $650,000 $700,000 $750,000 $800,000 03/31/21 06/30/21 09/30/21 12/31/21 3/31/22 Total Deposits (in thousands) Deposit Portfolio Composition as of March 31, 2022 12.0% 23.5% 60.4% 4.1% Noninterest- Bearing Transaction Interest-Bearing Transaction Savings & Money Market Certificates
Asset Quality 18BAFN Q1 2022 0.19% 0.30% 0.40% 0.43% 0.30% 0.00% 0.10% 0.20% 0.30% 0.40% 0.50% 03/31/21 06/30/21 09/30/21 12/31/21 3/31/22 Nonperforming Assets*/Total Assets Nonperforming Assets/Tier 1 Capital + ALLL (Bank) ALLL/Gross Loans Held for Investment (HFI) ALLL/Gross Loans HFI Excl Govt Gtd 1.59% 2.32% 2.53% 2.30% 1.81% 0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 03/31/21 06/30/21 09/30/21 12/31/21 3/31/22 9.40% 8.51% 9.22% 10.50% 8.08% 0.00% 3.00% 6.00% 9.00% 12.00% 03/31/21 06/30/21 09/30/21 12/31/21 3/31/22 7.35% 6.61% 5.25% 4.08% 2.71% 0.00% 2.00% 4.00% 6.00% 8.00% 03/31/21 06/30/21 09/30/21 12/31/21 3/31/22 * Excludes government guaranteed assets
Earnings 19BAFN Q1 2022 $5,606 $7,511 $13,016 $1,280 $2,811 $13 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 $14,000 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 1Q 2022 Net Income Record production in Residential Mortgage and strong PPP revenue, offset by large provisions for loan loss in Q4’20 Record earnings augmented by PPP loan sales in Q2’21 ($ in Thousands)
Earnings Performance Ratios 20BAFN Q1 2022 49.56% 74.61% 5.12% 12.54% -0.93% -20% 0% 20% 40% 60% 80% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Return on Average Common Equity Return on Average Common Equity (annualized) 1.84% 3.38% 0.47% 1.22% 0.01% 0% 1% 2% 3% 4% Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Return on Average Assets Return on Average Assets (annualized)
Omnichannel Delivery Convenient banking centers State-of-the art contact center technology First-in-class mobile banking Digital loan origination 21BAFN Q1 2022 WE MEET CUSTOMERS ON THEIR TERMS
CreditBench Total Q1’22 SBA loan production of $47.33 million, which represents a $11.95 million, or 20.2%, decrease from Q4’21 volume of $59.28 million, but an increase of $31.81 million, or 205.0% over $15.52 million produced in Q1’21. Continued to build the national lending team, which now comprises five experienced SBA lenders. Significant investments made in Q1’22 with loan production and related revenue from the new national team beginning to be realized in Q2’22. Strong pipeline growth with the total SBA pipeline expanding more than 80% during Q1’22 from $85 million at 12/31/21 to $155 million at 3/31/22. PPP loan forgiveness activities are generally winding down. Longer than expected lead time retooling SBA as the Bank emerges from PPP and processes significant volume generated from the Core lending team and organic FlashCap; current pipeline of $255 million. Sold both guaranteed and non-guaranteed SBA loan balances in Q1’22. Sold $4.35 million of nonguaranteed government loan balances during Q1’22, resulting in a total nonguaranteed government loan balance of $128.37 million at the end of Q1’22, representing a 0.49% reduction from $128.87 million outstanding as of 12/31/21. Sold $71.35 million in government guaranteed loans during Q1’22, resulting in total government guaranteed balance of $143.00 million as of the end of Q1’22, a decrease of 16.59% during the quarter. Bolt program focused on sub-$150,000 SBA loans. 22BAFN Q1 2022
RESIDENTIAL MORTGAGE DIVISION Residential mortgage production of $335.56 million in Q1’22, down 29.7% from $477.48 million originated in the prior quarter. Residential mortgage production was impacted by a natural seasonal slowdown and rapid rate increases, which significantly impacted refinance volume. 1,051 units of production in Q1’22 as compared to 1,520 units in the previous quarter. Secondary mortgage markets were significantly impacted during Q1’22 due to the war in Ukraine, which resulted in a significant loss position for the month of February. Although there was a rebound in March, continued headwinds and volatility in the secondary mortgage markets will be realized in the near-to-mid term. Beginning portfolio ARM and Construction to perm product and adding secondary market investors. Focused on rationalizing expenses and enhancing production. Recently added loan production offices in FL, CT, NY, SC. LoanBud platform focused on integrating residential and SBA lending serving self-employed borrowers across the nation. 23BAFN Q1 2022
RESIDENTIAL MORTGAGE DIVISION 24BAFN Q1 2022 Total Production ($ in Thousands) $407,726 $598,385 $641,077 $715,856 $522,101 $506,673 $477,476 $335,560 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 $800,000 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022
Community Banking Q1’22 Loan Production Summary: Total Community Bank Division loan production for Q1’22 was 203 units for $63.6 million, an increase of 23.78% and 161.86% over Q4’21 production of 164 units and $24.25 million, respectively. Consumer loan growth of $24.65 million was the highlight for the quarter with $20.99 million in HELOC origination. Overall Community Banking Division loan portfolio consisted of 994 units totaling $219.2 million as of 3/31/22, representing an increase of 15.72% in units and 11.59% in dollars as compared to 12/31/21. Loans HFI, excluding PPP loans, increased by a net $12.91 million, or 2.56%, during Q1’22. Q1’ Deposit Summary: Q1’22 deposit balance growth of $48.4 million, or 6.71% during the quarter. Aggregate deposit balance growth was driven by increases in savings and money market deposits, noninterest-bearing demand deposits, and interest-bearing transaction accounts, partially offset by a decrease in time deposits during the quarter. Q1’22 deposit balance growth of $163.0 million, or 26.8% year over year. Aggregate deposit balance growth was driven by increases in savings and money market deposits, noninterest-bearing demand deposits, and interest-bearing transaction accounts, partially offset by a decrease in time deposits during the quarter. Overall deposit portfolio consisted of 12,420 accounts totaling $770.6 million as of 3/31/22, up 3.6% and 6.8%, respectively from 12/31/21. Continued deposit cost alignment. New Banking Centers under development with W. Bradenton opening this summer, Sarasota (S. Trail) under construction, and Carrollwood (N. Tampa) undergoing significant remodel. 25BAFN Q1 2022
Key Company Highlights 26 Progressive institution in its products & services, technology, design and social responsibility located in an attractive market with historically strong economic and demographic trends Experienced management team and dedicated local board with clear and actionable growth strategy Few in-market peer institutions provides opportunity for organic growth as well as drives scarcity value Scalable platform focused on serving the banking needs of consumers and businesses in the Tampa Bay region, supported by national business lines in residential and SBA lending and an advanced technology platform Strong insider ownership. The majority of employees are shareholders through participation in ESOP and/or the Stock Purchase Program Dividend declared Q2'22 marks the 24th consecutive quarterly cash dividend paid since BayFirst initiated cash dividends in 2016 ✔ ✔ ✔ ✔ ✔ ✔ ✔ Formalized ESG principles through its ESG Policy, ESG Policy Statement, and dedicated management and board committees differentiates the Company from its peers BAFN Q1 2022
2022 Strategic Initiatives Fundamental Goals: Expand the Community Banking Division and core deposit base, while utilizing SBA and residential mortgage as lead products Maintain capital levels commensurate with risk profile and projected growth Promote BayFirst as a premier workplace Leverage investments in ESG program, minority lending program, and community engagement to differentiate BayFirst from its peers Ensure the Bank’s risk management and compliance management systems evolve with the Bank’s growth and expansion Increase the float of the Company’s share and expand its retail shareholder base Transformational Initiatives: Establish BayFirst as a technology-driven organization by leveraging the advanced technology platform developed over the past year to create operational efficiencies and additional revenue opportunities while enabling a comprehensive and high- value digital experience Enhance customer experience through technological evolution and development of the Contact Center Expand recurring revenue while leveraging recent investments in infrastructure and technology and rationalizing costs Selective migration to national portfolio lending Convert to national bank charter and rebrand the Bank from “First Home” to “BayFirst” Position the Bank to achieve an “Outstanding” CRA rating 27BAFN Q1 2022
Financial Statements
BAFN Q1 2022 29 BayFirst Financial Corp. and Subsidiary Consolidated Statements of Income Unaudited (Dollars in Thousands, Except Per Share Data) BAYFIRST FINANCIAL CORP. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) For the Quarter Ended (Dollars in thousands, except per share data) 3/31/2022 12/31/2021 3/31/2021 Interest income: Loans, other than PPP $ 7,115 $ 7,320 $ 6,599 PPP loan interest income 140 258 2,199 PPP origination fee income 300 381 6,013 Interest-bearing deposits in banks and other 185 150 81 Total interest income 7,740 8,109 14,892 Interest expense: Deposits 1,217 1,219 1,320 PPPLF borrowings 20 92 766 Other 97 105 176 Total interest expense 1,334 1,416 2,262 Net interest income 6,406 6,693 12,630 Provision for loan losses (2,400) (2,500) 2,000 Net interest income after provision for loan losses 8,806 9,193 10,630 Noninterest income: Residential loan fee income 13,191 18,601 32,029 Loan servicing income, net 461 429 704 Gain (loss) on sale of SBA loans, net 4,621 4,564 — Service charges and fees 282 298 222 SBA loan fair value (loss) gain (197) 33 72 Other noninterest income 510 289 132 Total noninterest income 18,868 24,214 33,159 Noninterest Expense: Salaries and benefits 13,697 12,603 13,167 Bonus, commissions, and incentives 4,606 8,319 11,873 Mortgage banking 1,002 1,024 1,695 Occupancy and equipment 1,421 1,329 1,332 Data processing 1,467 1,323 1,269 Marketing and business development 1,742 2,176 1,642 Professional services 1,307 1,493 924 Loan origination and collection 670 168 496 Employee recruiting and development 871 914 614 Regulatory assessments 69 102 102 Other noninterest expense 795 773 607 Total noninterest expense 27,647 30,224 33,721 Income before taxes 27 3,183 10,068 Income tax expense 14 372 2,557 Net income 13 2,811 7,511 Preferred dividends 208 208 332 Net income available to common shareholders $ (195) $ 2,603 $ 7,179 Basic earnings per common share $ (0.05) $ 0.66 $ 2.05 Diluted earnings per common share $ (0.05) $ 0.61 $ 1.82
BAFN Q1 2022 30 BayFirst Financial Corp. and Subsidiary Consolidated Statements of Financial Position Unaudited (Dollars in Thousands) BAYFIRST FINANCIAL CORP. CONSOLIDATED BALANCE SHEETS (Dollars in thousands) 3/31/2022 12/31/2021 3/31/2021 Assets Cash and due from banks $ 3,141 $ 2,869 $ 2,857 Interest-bearing deposits in banks 118,960 106,858 58,140 Cash and cash equivalents 122,101 109,727 60,997 Time deposits in banks 3,881 2,381 2,381 Investment securities available for sale 41,656 30,893 — Investment securities held to maturity 2 2 31 Restricted equity securities, at cost 2,520 2,827 2,719 Residential loans held for sale 75,022 114,131 208,762 SBA loans held for sale 1,445 1,460 — SBA loans held for investment, at fair value 8,769 9,614 10,475 Loans held for investment, at amortized cost net of allowance for loan losses of $10,170, $13,452, and $22,017 542,858 560,882 1,356,041 Accrued interest receivable 3,150 3,564 8,584 Premises and equipment, net 31,037 29,671 18,303 Loan servicing rights 7,601 6,619 7,444 Deferred income taxes 793 454 5,712 Right-of-use operating lease assets 4,166 4,543 3,979 Bank owned life insurance 24,698 24,547 12,268 Other assets 18,842 15,780 19,135 Total assets $ 888,541 $ 917,095 $ 1,716,831 Liabilities: Noninterest-bearing deposits $ 92,680 $ 83,638 $ 77,766 Interest-bearing transaction accounts 180,815 163,495 149,678 Savings and money market deposits 464,847 423,864 325,187 Time deposits 31,787 50,688 54,633 Total deposits 770,129 721,685 607,264 Federal funds purchased — — 40,000 Subordinated debentures 5,987 5,985 5,951 Notes payable 3,186 3,299 3,641 PPP Liquidity Facility — 69,654 957,413 Accrued interest payable 86 326 894 Operating lease liabilities 4,377 4,747 4,173 Accrued expenses and other liabilities 9,897 15,109 18,074 Total liabilities 793,662 820,805 1,637,410 Shareholders’ equity: Preferred stock, Series A; no par value, 10,000 shares authorized, 6,395 shares issued and outstanding at March 31, 2022, December 31, 2021, and March 31, 2021; aggregate liquidation preference of $6,395 6,161 6,161 6,161 Common stock and additional paid-in capital; no par value, 15,000,000 shares authorized, 4,013,173, 3,981,117, and 3,678,566 shares issued and outstanding at March 31, 2022, December 31, 2021, and March 31, 2021, respectively 52,252 51,496 46,168 Accumulated other comprehensive (loss), net (1,458) (420) — Unearned compensation (630) (17) (35) Retained earnings 35,431 35,947 20,336 Total shareholders’ equity 94,879 96,290 79,421 Total liabilities and shareholders’ equity $ 888,541 $ 917,095 $ 1,716,831 Unaudited Unaudited Preferred stock, Series B; no par value, 20,000 shares authorized, 3,210, 3,210, and 6,980 shares issued and outstanding at March 31, 2022, December 31, 2021, and March 31, 2021; aggregate liquidation preference of $3,210, $3,210, and 6,980, respectively 3,123 3,123 6,791